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India and its problem of resource management

The population of the Indian subcontinent was 1217, 000 million in 1995. India with 931,000 million was just behind China, the most populous state in the world with 1174, 000 million. China and India face the population problem along with that of resource utilization. China followed a policy of Marxist-Leninist Communism and India that of British inspired Fabian Socialism. The outcome of these policies is of great interest to economists. India started on path of maximizing self-sufficiency in both industry and agriculture.

The political leaders were faced with Herculean task of attacking poverty of the masses- to supply food shelter and employment to the bulk of the population, which suffered below the poverty line. An era of planning inspired by Nehruvian socialism led to an economy stifled by regulation and License Raj. Trade, investment and technology suffered from the shackles of excessive controls. The Public sector, which was envisioned as the commanding heights of the economy, became white elephants languishing in inefficiency and losses. Energy sector in particular reflects the area of resource mismanagement.

Production and distribution was dominated by the state run State Electricity Boards (SEBs). Despite great investment the national power capacity deficit estimated in 1994 to be 10 and 21 percent of peak demand. Coal, Nuclear and Hydro electricity sources have been partially explored. The problem is in distributing power, setting tariffs, and collecting revenues. The inefficiency of the Public sector is particularly notable. In 1994, India had over 1000 public enterprises. They dominated the core sectors like mining, manufacturing, transport and communication.

But they were inefficient and financially backward. Factors for their backwardness include huge cost and time overruns in project implementation, choice of outdated technology, overstaffing etc. The major resource crunch of modern India is in water supply and energy. Rapid industrialization and urbanization has led to a crisis in water supply. By WHO standards, Most of India’s water resources are polluted. The Yamuna receives about 200 million litres of untreated sewage everyday as it passes New Delhi. Studies estimate that around 70 % of water in India is polluted.

One of the major factors limiting output has been identified as power shortages. Supply deficits have burgeoned 7% annually from 1992 to 1996. Problem is not in generation but in transmission and distribution- the inefficiency of the State Electricity Boards. The Energy/water crisis portends a systemic collapse for the Indian economy and urgent action must be undertaken to prevent it from escalating to an unmanageable condition.

REFRENCE: 1. Burnett. A. 1997 Resource management in Asia- Pacific: RMAP working Papers. No. 8 (online) 18/01/2007 http//rspas. anu. edu. au/papers/rmap/wpapers.